India almost brought the Doha negotiations to a standstill by stating the “Food Security Bill” as non negotiable. The result of this was that WTO accepted the conditions and the developing nations can cater to the need of public stock-holding of food grains to make it available to the poor at a subsidized rate. The Doha Development Round aimed at reducing the trade barriers around the world, and thus increase multilateral trade. The developed countries had suggested that no countries should offer food subsidies to get a level trading ground for the participating countries. However food was not available to the poor in developing countries and the government needed to offer subsidies to them in order to make food available.
The food security law offers to provide rice and wheat to 67% of the Indian population. According to this law:
* The poorest of the poor will get 35 kg of food grain/family/month
* Others will get 5 kg of foodgrain/person/month.
Following is an address by the ruling party’s president regarding the provisions of this law. http://www.youtube.com/watch?v=ccFbx9CcKmA
The WTO Agreement on Agriculture of 1994, the participating countries cannot provide food support as it is a “trade-distorting support”. The G-33 counties have been trying to update this rule since 2006. When the Obama administration opposed the food security act in India on the grounds of the 1994 Agreement on Agriculture, it was frowned upon as an attack on “Right to Food”.
As noble as India seems in pushing so hard to protect the interest of the poor in India, cynics argue that this is new law came into existence mainly due to the politics and upcoming election year in the country. The current ruling parties term has been marked with a long record of scams and disappointing people. In addition to this, the India is also trying to cope with macroeconomic issues such as the budget deficit, slow down of economy and depreciation of rupee. Due to this there is a significant probability that they would not be voted back to power in the upcoming elections. By passing this law, the ruling party is trying to entice voters and is a huge part of their election campaign. Critics also argue that the distribution channels will facilitate corruption on the implementation level due to bad infrastructure and India may not be able to afford the expenditure on the Food Security Bill.
Considering the importance for this bill given the election year and circumstances, the food security bill was not negotiable by India for reasons other than providing food for poor. It is interesting how an election year and the right opportunity precipitated in lifting the rule of not allowing the subsidies (under WTO) benefiting the trade for developing countries and more importantly the poor citizens of the countries bound by WTO. It can be speculated that an election year in a democracy may have given the push necessary to could have had a significant role in affecting multilateral trade policies
1. Megha Bahree, How Bad, Really, Is India’s New Food Security Bill?, Business, 9/02/2013 @ 3:27AM http://www.forbes.com/sites/meghabahree/2013/09/02/how-bad-really-is-indias-new-food-security-bill/
2. Shailvee Sharda, Will corruption eat into benefit meant for state?, The Times of India, Dec11,2013,04.32AMIST, http://www.rediff.com/news/special/all-you-wanted-to-know-about-the-food-security-bill/20130829.htm
3. Timothy A. Wise, US opposition to ambitious Indian program a ‘direct attack on the right to food’,December3,201306:53 http://www.globalpost.com/dispatches/globalpost-blogs/global-pulse/obama-administration-food-security-act